DSCR Loans California: No-Income Mortgage Loan

DSCR loans allow Landlords to leverage current and future rental properties to achieve their investment goals.

DSCR loans

Debt-Service Coverage Ratio Loans – Your Guide to Applying One

Conventional loans

Businesses in every known industry, whether big or small, need capital to operate.

This working capital serves as a bloodline that enables any business establishment to continuously steer towards reaching its goal.

A goal that most often includes gaining profit. Without this capital, an organization or a simple business will lose steam and eventually close.

When it comes to finding capital through business financing, borrowing from banks or lending companies is the usual route.

One might argue that borrowing or taking a loan would be a misstep for a business especially if the interest to be incurred is high.

But in truth, business financing through loan is a common practice that even huge and successful corporations do.

Even in real estate and mortgaging, financing is a very huge factor. If you are struggling to pay your mortgage or want to broaden your property portfolio, you are probably in need of some financing help.

But applying for a regular loan from a bank could take many days and even months.

There are many paperwork and processes that you have to undergo with a very low chance of approval.

However, there is a better solution to this dilemma. One that can give you a lifeline in the fastest way possible and that is a DSCR Loan.

What is a DSCR Loan?

About Sprint Funding

DSCR Loan has been gaining popularity in the property market including those of the rentals and real estate investment.

Beforehand, this type of loan was almost typically exclusive for business support only. This is the kind of financing that helps out startups and SMEs.

Later on, the potential seen in the ever expanding property market allowed the branching out of DSCR Loan application into this industry.

And here at Sprint Funding, every client or prospect is assured to have the lowest and most competitive mortgage financing.

DSCR Loan is a type of debt financing wherein the lender (cash flow lending bank or company) factors in the cash flow projection of a borrowing company or individual.

Here, the DSCR loan lender looks at the expected cash flow of the borrower and sometimes its past performance.

In the case of the property market, for example in rentals of a commercial building, the lender will examine the past rental income of the building, its current and future expenses like utilities, and its projected income.

From here, the DSCR lender will arrive at a decision on whether to grant a loan to the borrower including the amount to be given.

Investors in the real estate market typically use this type of loan.

Important Components of DSCR Loan

Like any type of loan, the cash flow takes into consideration several pointers.

Usually, these components are universal in every bank or mortgage company such as here at Sprint Funding. The core goal of these components is to arrive at a positive cash flow.



Income is not your salary income as an employee but the projected profit and or value of the property in question.

In the rental market, this is the expected income or rental sales to be generated in a specific time, usually a year. If you are just starting, there are more considerations that you have to take.

  • Competition or market.
    You have to look at the existing market within your area so you do not go below or way above the range. This will be helpful in enticing renters.
  • Rental price per month.
    Knowing about the existing market will help determine the price or rental range of the property or units if many. Sometimes, this can be subjected to changes depending on the movement of the real estate market.

Expenses and Utilities

The projected income will be rated against the expenses and utilities of the property.

The usual expenses include but are not limited to basic utilities, mortgage (if you are still paying for the property), taxes, and even property management if you employ people to do it for you.



The interest will be determined by the lender from the evaluation of the property’s cash flow. In most cases, there is already an existing interest base or standard rate that applies to every borrower but this can also be situational or case-to-case basis.

In order to secure a DSCR loan, having a positive cash flow is needed. Think of it like a lender investing in your property.

The lender needs an assurance that it can get its investment back after a certain period of agreement. The great thing is, the agreement between the two parties can be very flexible. It can even be extended if agreed upon.

For example, let us look at Property A applying for this type loan.

For the most basic computational example, the cash flow needs to be known. Cash flow here is the difference between the expenses from the rental income.

If Property A has a monthly rental income of $5000 and collective expenses of $3000 (Mortgage $2000, Utilities $500, Others $500), the cash flow would be a positive value of $2000.

Property A Cash Flow = $5000 – $3000
Property A Cash Flow = $2000

Note that this is only a very basic computation of cash flow.

For a complete professional advice and consultation, don’t hesitate to send us a message.

Comparison with Asset Based Loan

To further understand DSCR loans, let us examine it against one of the common types of loans.
About Sprint Funding

Asset Based Loan like its name suggests is a type of debt financing that uses asset or property as collateral. Companies usually apply for this if they need additional investment money to operate or if they have plans for expansion.

In contrast, there is no asset or physical collateral needed in a DSCR loan. Your property is not placed in a situation where it can be taken by the lender.
The only powers you are going to give the lender are interest rates and partial control of your income.
This income is partially given to the lender in a given period of time depending on the agreement.

Basically, an asset based loan operates through asset collateral while a DSCR Loan operates through the cash flow of the borrower.

Advantages of California DSCR Loans with Sprint Funding

There are various important reasons why this loan would be the most appropriate for your business and property.

Advantages of Cash Flow Loan 01

Better access.

The great thing about taking this loan from us is that you can get your loan almost right away. If you desperately need the loan to pay for your mortgage, we can make that possible for you. In a span of a day to a week, you can get it already.

Advantages of Cash Flow Loan 02


Our agreement with you as our client can be very flexible and to your own advantage. If there will be a need for an extension of the agreement, we can accommodate that provided it goes with our basic standards.

Advantages of Cash Flow Loan 03

Faster process and less paperwork.

Other types of loans would require a lot of things such as personal income, value of assets in possession, and even credit score. Taking a DSCR Loan with us would just be a cakewalk for most clients. We just have to assess your property’s cash flow and then we are ready to make an agreement with you.

Advantages of Cash Flow Loan 04

No asset or physical collateral.

Are you worrying that your property will not be taken? Well you shouldn’t be because this type of loan doesn’t require physical collateral.

Advantages of Cash Flow Loan 05

Reasonable interest rate

The best thing about applying DSCR loans with Sprint Funding is that you are assured of getting a very competitive and reasonable interest rate.

DSCR Loans – Your Guide to Applying One


5 years.

The 6-month DSCR Loan is designed for individuals who need short-term financial assistance. Borrowers must have a minimum debt service coverage ratio of 1.25x and the maximum maturity on these loans are 5 years with an LGT/ATP somewhere between 65%-75%.

Loans are often inevitable when purchasing property, especially when the property will be used for business.  The debt service coverage ratio is a loan that allows a borrower to qualify for a DSCR mortgage based on the income from a property where the loan was used as an investment.

Are DSCR loans for 30 years?

As long as you can cover your debt service with rental income, then it will qualify. And there’s no need to file taxes or furnish personal details for this loan type.

You’ll also never sign a 4506 form when getting one from $100K-$3M in value. And you can get your 30-year fixed-rate loans in the process.

What is a “Good” DSCR?

A DSCR loan is also known as an investor cash flow mortgage.  This allows a borrower to finance an investment property using rental income.  This means that the lender should have enough evidence that a borrower will be able to pay through the cash flow of a business.

Debt Service Coverage Ratio

The ideal debt service coverage ratio is 1.25 to 1.5 which is considered a “strong” ratio.  This ratio means the borrower has enough sufficient debt coverage for paying a loan.

If the ratio is lower, a borrower may be required to have an interest reserve because lower ratios often mean that the company is facing financial difficulties and may not be able to pay the loan.

Is it hard to get a DSCR loan?

A DSCR loan requires that you have the ideal ratio of how much cash flow is available for debt service.  You should have a balance that allows you to meet your debt service obligations. Otherwise, the loan might result in default, foreclosure, and potential bankruptcy.

The main components of a DSCR that will help identify if you have positive cash flow that will allow you to be approved for a DSCR loan are:

Net Operating Income

Your property should have a positive projected profit that will not place it in question.  If you are renting your property, consider looking at the competition or existing markets within your area that are subject to change.

Real Expenses and Utilities

You should have a projected income rated against the expenses and utilities of your property.  Make sure they are not too big to severely impact your income in the years you will be paying amortization for a DSCR loan.

Interest from DSCR Lenders

We will determine the interest rate that best fits your situation.  This will be determined after a thorough evaluation of the cash flow of your property.

The most important requirement in a DSCR loan approval is positive cash flow.  This assures us, as your lender, that our investment in your property is worth the risk.

Call us today for a professional consultation on your commercial financing through a DSCR loan.  We will provide you with all the needed details for a DSCR loan-based financing option.

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Should you decide to apply for this type of loan, we are here to assist you.

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